Tenders to build Nijgadh airport to be called by next fiscal year

The government will invite tenders for the construction of Nijgadh International Airport by the next fiscal year as it moves to prioritise the development of all planned international airports which have stalled for various reasons, Deputy Prime Minister and Finance Minister Krishna Bahadur Mahara said while presenting the budget statement for fiscal 2017-18 to Parliament on Monday. The government has allocated sufficient funds for the construction and upgradation of the airports, and the construction of Pokhara International Airport will also be started by the next fiscal year, he added.

The ongoing upgradation of Gautam Buddha Airport in Bhairahawa to an international airport will be completed by April 2019, which means it will be 10 months behind schedule. “I have allocated a combined Rs13.72 billion for these three projects for the next fiscal year,” said Mahara while presenting the government’s annual financial plan.

Sanjiv Gautam, director general of the Civil Aviation Authority of Nepal (Caan), said that the announcement about inviting tenders for the construction of Nijgadh airport was encouraging, and that he expected there would no more delays in the development of the much touted infrastructure. The government has been working to determine the most appropriate modality for the construction of the planned airport in Nijgadh. It has constituted a five-member committee to recommend whether the modern facility should be built with public or private financing or both.

The airport scheme envisions building a modern airport in Nijgadh, 175 km from Kathmandu in the southern plains, as an alternative to Tribhuvan International Airport (TIA), the country’s sole aerial gateway, which is strained beyond capacity and often remains inoperational for hours in the winter due to fog. Likewise, the international airport project in Pokhara is back on track after stalling for a year as issues over opening an escrow account have been settled. The government signed a $215.96 million soft loan agreement with China EXIM Bank in March 2016 for the construction of the infrastructure in Pokhara.

Construction was delayed after China EXIM Bank set a condition that a joint escrow account should be set up into which Caan, the project executing agency, should deposit the income generated from all its airports. Caan refused to do so which delayed the release of the project funds, and construction of the airport stalled. Now the issue has been settled, according to the airport project. On April 21, the bank issued a letter stating that its earlier condition regarding the escrow account had been amended.

Likewise, the expansion of Gautam Buddha Airport in Bhairahawa into an international airport was originally slated for completion by December 2017. Shortages of fuel and building materials due to the months-long Tarai banda in 2015 delayed work by six months, and its operation deadline was extended to June 2018.

The latest setback—a dispute over payments between the Chinese contractor and the Nepali sub-contractor—has stalled work at the construction site. The delay is likely to further push back the project completion deadline to 2019. The government awarded the contract to upgrade the airport to the Northwest Civil Aviation Airport Construction Group of China in October 2014.

The $92-million TIA improvement project in Kathmandu, jointly funded by the government ($12 million) and the Asian Development Bank ($80 million in loan and grant), has also been delayed. It was launched in December 2010 and the completion deadline was set for March 2015. However, the completion date had to be pushed back to 2019.